Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation

Good morning, everyone. I hope everyone was able to stay dry getting over here, but that's one of the reasons we're a little-- a few minutes behind in terms of getting started. We are going to go with a modification of the agenda. We will be doing Issue Number Two, the opening remarks from Secretary Karen Ross. Then we're going to jump down to Issue Number Six so that we can get that group back to work promptly and then we will go back through the order.

However, we will hold on to Issue Number One until Assembly Member Cottie Petrie-Norris arrives, which will be sometime after 10:00, but-- so I don't think we'll be holding it very long. So we'll be going Two, Six, and then I believe One. And with that, we'd like to have Secretary Ross. And for those few of you out there that don't know or people in the audience, this is Secretary Ross's last time with this administration, at least, being here.

And so we really appreciate it, number one. We've appreciated her candor with us and and sage insights that she's given us over the years, but we will use today to sort of pick her brain to help us as we move forward potentially without her continuing guidance here and stuff. So with that, Secretary--

--we'll turn it over to you.

Thank you so much, Mr. Chairman.

I'm thinking about my brother saying nobody can pick her brain. It's too muddled up to get anything out of it. But it has been-- to be a farm girl from Western Nebraska, which I used to call the middle of nowhere, but my pastor said you should think of it as the center of everything, to be able to travel the roads to come to California at this beautiful, wonderful state of innovation and beauty and landscape and agricultural productivity in a way I had no idea was even possible with the 400 crops that we have and the billions of dollars that are generated just at the farm gate, the hundreds of thousands of jobs that I like to say, they start in our fields, our orchards, our pastures, all the way to the longshoremen and women who are loading the ships, taking it around the world.

But what I wanna spend a bit of my time on today is about some of the recent investments thanks to you and the Legislature, to the first partner, to the governor, and really thinking more intentionally about our local food systems.

Yes, we continue to be the number one agricultural state. We have been for the entire time that those records have been kept at the United States Department of Agriculture. In 2024 is over $61 billion, which was a new record. What we don't keep track of in those numbers is what the cost of production is and what margins are doing.

And I do wanna say that with the 400 different crops that we grow, with the landscape that we cover, with the stewardship that's really been advanced because of your investment in climate-smart agriculture, it is hard to fathom that we have so many crops suffering low commodity prices and shared challenges at a time where it-- I want to celebrate it, and we did celebrate it yesterday, but we have to be very honest about we can't take that for granted.

And so, the continued investments both through the Farm Bill as well as what we do here locally for California, I think, will be even more important moving forward, and I'll get into that. I'm really pleased to be able to just give you an overview of our budget, which for the proposed year before May Revise is $685 million with a little over-- well, we have 2,059.1 personnel years in that now.

I'm looking at someone who has years and years of extension in budget language. I don't know where that 0.1 person is but, you know, if we could toss it up, that would be fine with me. We're doing it with pennies, so whatever.

But our budget includes $213.5 million from the General Fund, $190.9 million from industry funds, which continue to increase, $132.3 million from federal funds, which are on a bit of a cut pathway, $74.8 million from bond funding, which is primarily Prop 4, and $73.7 million from Special Funds. The challenges we face as a department are exactly what's being faced by farmers from Ventura County all the way to Mendocino County when it comes to weather, extreme weather, and climate related changes.

It's easy to lose sight of that direct connection, but the volume of rain we're getting here in the middle of April when we planned Ag Day yesterday to hopefully avoid a big rainstorm didn't work out exactly the way we expected, but I'm very grateful for everyone who came out to celebrate agriculture.

The extreme weather events that we've had, whether it's extended drought, deeper droughts, longer lasting droughts, the fact is, it is a hotter, drier future that we must plan for and invest in, and taking advantage of things that we know that can work to help us at a time of climate change, but also the implementation of SGMA, the Sustainable Groundwater Management Act, and really capitalizing on the types of investments that will be necessary to continually improve on farm water use efficiency, which also saves energy and also improves our nutrient management in ways that really help reduce the number of inputs and being able to do groundwater recharge, huge opportunities for that.

I'm trying to remember if you've got one of the few adjudicated basins in your county, but certainly, the implementation of Sustainable Groundwater Management Act at a time of lower commodity prices and higher production costs is a mismatch that will cause a lot of pain throughout a number of our groundwater basins.

We also know that the disruption in our supply chains that we first witnessed during COVID really highlighted for us the importance of building in some redundancy into our very efficient food delivery system. We saw at that time some really creative solutions at the local level. We've been able to witness the benefits of programs that are around local food procurement, what happened with being able to draw down.

Because of one-time surplus dollars, we were able to get funding for the California Nutrition Incentive Program, which matches dollars with the federal program and the Farm Bill to really do more local procurement to help people go to farmers' markets and enjoy the healthy, nutritious benefit of all that they can purchase directly from a farmer. Those are all hugely important investments.

We also saw in the previous administration, under Secretary Vilsack, significant investments that were made in resilient local food infrastructure and food business centers. I call those out because they all make up what we hope to transform as far as better access to local food systems that are equipped to be able to serve our Farm-to-School Program, hopefully with some of the new emphasis on food as medicine, healthcare institutions, and as our VA centers and other types of things.

I cannot underscore how important the commitment of the Legislature working in partnership with the administration on Farm-to-School has been. We have undertaken this pathway, I think, in a way that is a model for other states across the country. The interest of Farm-to-School-- good morning. The interest of Farm-to-School is very, very high because of the recognition.

If we can work with children from the youngest age to learn about healthy eating and what that means for their brain development as well as their physical development, we are making a difference in how they will eat for the rest of their life to avoid chronic disease, and we know from the estimates that at least 50% of chronic disease is directly related to diet and nutrition. That's not matching up with avoiding those chronic diseases and the money that is spent on pharmaceuticals to address that at later stages of life.

I'm gonna take myself out of that category, but I could qualify, just so you know. The program has had over $120 million. We are now reaching the school districts that serve almost 50% of our student population, kindergarten through 12th grade. Just yesterday, I was part of a very meaningful conversation with the president of the University of California, and the chancellor, and several presidents of the CSU system who are all looking to go down a similar pathway.

And I feel that we have the building blocks with the investment that we've made to really be able to move to the next phase of building out a local resilient food system with local procurement by institutions. That really is important, especially now to small and mid-size farmers. It may not always be at the best price, but it will be, hopefully, a steady, reliable market, which makes a huge difference when you're planting for next year and you know that you have a market.

You're gonna be willing because you can buy seed at that time or fertilizer at that time to know what the price is as opposed to the situation that many farmers are in now where they've already contracted out for this year's crop, but the investment for fertilizer and seed was made last year, so there's gonna be a mismatch there. These types of markets are really, I think, a salvation for our small and mid-sized farms.

When we think about just the number of regulations that happened to all small businesses, but in farming, it's literally hundreds of regulations across all of government. That certainty of a market is what will really make a difference for them. So the Governor's Budget does propose continuous funding of almost $25 million for the Farm-to-School Program.

We've been able to capitalize on the investment that was made with a minimal amount of baseline funding for 16 regional navigators. What they are doing is matchmaking farms to schools and schools back to farms, helping to build that supply chain of understanding what's growing in season, at what volume, at what volume do you need school nutrition director.

It has already-- in the five years that we've been running this program, has already helped small farms, some that are now the small farm aggregator for their neighbors to help more farmers access the Farm-to-School Program. We did from day one, built in extensive evaluation of this program to be able to evaluate initially economic benefit to small farms.

We've been able to do that, and I have program people here who can go into some of those details as well as understanding what's working and what else we need to do to make this job easier for school nutrition directors who do not have an easy job to do with the budgets that they have and really thinking more holistically about small-scale processing as well as this program has already proven that it is pulling through products from farmers who are doing climate-smart agriculture and/or organic agriculture.

It's good to do the practices. It's better to do the practices and know that there's a market for the way in which you are growing it. And this is the most tangible way we have of knowing that. We know that we have the highest environmental standards. I'm very proud of our high labor standards that we have in this state, but it's important to also know we'll never have enough government dollars for incentive programs.

We also need markets to work on rewarding that type of stewardship. That type of work with our farm workers are so important to our food system, and that we're getting it to people of all social economic standing to be able to have access to this California-grown food. You gave me a few minutes to answer some specific questions.

I do wanna touch on how important our work is with just our core programs, which is how do we protect the State of California, both our agricultural resources and our beautiful natural resources from invasive pests? The invasive pest issue is something we're never gonna get away from because as much as we love living in California, tourists like coming here, and we welcome them.

We're a hospitality state. We welcome them, but they can tend to transport stuff. We continue to have the ports of landing for about 50% of cargo that's going across the country. When we can stop stuff at our ports of entry, we're protecting other trees and landscapes from our invasive pests, and the investment that we make in our prevention program as well as the ability to rapidly respond is why we've been able to knock down every invasive pest infestation of exotic fruit flies.

And we always do an analysis to know that it is a new form of that pest that we're knocking down. We had a historic outbreak three years ago in Southern California. It was an all-of-government approach that included our friends from the Conservation Corps. We did everything from knockdown, to mating disruption, to tree stripping in Riverside County, which is the home to some of our earliest plantings of citrus orchards.

And Conservation Corps was a hugely important partner of going door to door to take that food off the tree so we could disrupt that feeding resource to these pests to double-wrap it and, unfortunately, have to destroy it because you never know till you cut it open that there's a fruit fly in there.

Very successful program. Unfortunately, one of my questions is, what are we seeing from the federal government? And we have been told that there's about $7.5 million less from what we did have for this type of program, and the number of pests and the variety of pests continue to change from different places of the world. Part of that is our climate is changing so things can survive here longer, so that continues to be an important place to look at.

One of the things that we've just completed and should be released, hopefully, yet this month, but we're running out of April, is a three and a half year study taking a look at all the data points on the invasive pests that we have handled throughout the years to protect the State of California agricultural and natural resources, to be able to do a deep dive analysis of the pathways that they're coming in on.

And we have pathways that we didn't have 20 years ago when we did an analysis like this. One of those is ecommerce, as just an example, in addition to all the cargo that moves up and down the state. We also, last year, had bird flu in a way that we've never seen, and this is one that keeps me up at nighttime when we think about zoonotic diseases that cross species. We had bird flu, which traditionally is in birds.

We now know that it's endemic in our wild bird population, and we're the home of the Pacific Flyway. We had a number of poultry farms that were impacted by this, but we had a crossover to dairy and then dairy back into the poultry herds. It is, thanks to the investment that was made by you with the administration, that we have the resources. I'm happy to say, finally, after over 700 herds that had some level of infestation, we are now out of that situation. But we have to be super vigilant.

We have to make sure biosecurity on the farms is protective enough to be able to do that. I'm also pleased because of the investment that's happened in the last 10 years, we have a new animal health laboratory that will be opening south of Modesto. I'm looking forward to that ribbon cutting and the new cutting-edge technology that we'll have for improved diagnostics to help us find these things faster, respond immediately, and keep it from becoming a long-term infestation.

I touched a little bit on changes that are happening at USDA under the new administration. In addition to ongoing budget cuts and just their proposed budget for this year, at the top line is about a 28% reduction at USDA. That includes not only cuts to some of our pest prevention programs, food safety programs, marketing programs, but also research, and the research program at USDA is over $1 billion a year. A lot of that is competitive funding that goes out to our universities, and part of it is also in-house research.

I like to say, I know we don't grow as much corn as they do in the Midwest, but that's like eating our seed corn. We are-- we coast on the fumes of research that was done 25 years ago and is still carrying us through. Now is not the time for research cuts. So that's one that we know. We have to watch very carefully what will happen with those APHIS programs that fund a lot of our cooperative work on the ground for pests as well as animal diseases.

One of the big ones that's not big in dollars but it's big in impact is what's being proposed for our National Agricultural Statistics Service. They have a lot of analysts that collect data on an ongoing basis throughout the growing season to get better crop forecasts, information that's very helpful for planning, for financing, for marketing, for everything that we do, and a lot of the cuts that are being proposed will affect a lot of our specialty crops because they're not grown in other states. It's part of a relocation effort that has been announced by USDA to put more people into field offices and not so many in Washington, D.C.

That all sounds good, but most people won't fly to Salt Lake City to do a meeting with some of the branches that will be there. Salt Lake City is a designated headquarters for the Western Region, and that will take some getting used to, and we still haven't seen the final stages of that.

Well, it is the agricultural capital of California-- I mean, of the United States, correct?

I'll just say, not to be a braggart, but it is 37th in agricultural productivity. I'm just-- I'm just saying. That's all I'm saying. I love my friends from Utah. So that-- we're watching that very carefully because of some of the reports that would be probably eliminated if we're not able to pick that up. We are hopeful that we'll be able to staff at least one or two positions while we make this transition to know what the final is going to be on that.

There are other cuts happening in other agencies like the Food and Drug Administration, which we have a cooperative agreement for our Food Safety Modernization Network for the 20,000 covered farms that are produce growers in the state. So far, that funding was increased last year with a lot of work by FDA. We feel that we're gonna be okay on that front, but there are other cuts that are happening at FDA. One of the other questions that I had was just about some of the pressures that we're seeing, and I think I've covered that.

You all know because of your constituencies in agriculture--good morning, Assemblyman--the things that I've covered. We have had in recent years, because of the disruptions, the loss of the Chinese market where everybody's scrambling to build new markets in Southeast Asia as well as South America.

It takes years, if not decades, to build these markets, which we do through work through the USDA Market Access Program, which we're very fortunate that finally, after decades of being at a flat number, Congress did improve the funding for the MAP Program, but those are dollars that can only be used for foreign market marketing and emerging markets, and it will take us decades to rebuild new markets that can take the place of what China meant in the totality of what it was.

We also have to note that Canada and Mexico are two of our top five markets. They're also our neighbors, our friends, our business colleagues, and so we need to pay attention to what is happening there. Those global markets will continue to be crucial to the overall success of California agriculture, and being able to use our federal grants from USDA to do that marketing has given us expertise that we believe can also help us with the work that we have started to do on local resilient food systems, Farm-to-School, more of that small-scale processing of local goods to also get that into the school.

So the proposal that you'll see for the continuous funding for the Farm-to-School Program includes a couple of positions to really capitalize on the expertise we've built all with federal dollars, but being able to really, really use that expertise to better connect the entire food supply chain and the distribution systems that go with that.

We also wanna make sure that we're in a position to continue the technical assistance on climate-smart agriculture to make sure that the foods we're pulling through that system are being produced with the types of practices that we know will help us draw down carbon and be a part of the climate solution, especially at a time where we're part of natural working lands and have targets for continuing this type of work for healthy soils and growing our organic production.

Wanna shift to the food safety risk because they are something that we spend a lot of time on in this state. Food safety is everybody's business. Like I said, we have 20,000 farms that are covered under the Produce Rule. Natalie Krout Greenberg here is from inspection services.

With the funding in partnership with FDA, we've been able to build out the expertise to do the audits, the inspections, as well as on-farm readiness reviews. We've had outbreaks, and when we have an outbreak, people do not distinguish what field, what county, or what state it came from. It can have not only a chilling effect on markets; more importantly, it's about people getting sick and people in the past who have died.

And this program is about preventing foodborne illnesses and understanding all of the factors that create the risk that we're about managing and creating this new way of looking 360 degrees. Where are the risks, including adjacent land uses, the water sources, both pre-harvest and post-harvest? It's very complicated, multiple decision-making in that food chain, but the people of California that are in farming and also the packaging and getting that fresh produce to markets are very committed.

We have great industry partners in being able to do this work, but being able to understand that microbial, that new pathogen that could be the one, have we really identified that risk and mitigated it as much as we can is a lot of what this program is about.

And the ongoing need for research and education in partnership with our colleagues at the Cooperative Extension is gonna be crucial to the total success of making sure when we put more local food into the food system, it's from farms that are practicing good food safety practices as well as what we're putting into national and international markets.

I'm happy to answer questions about that. Lessons learned, there are so many. So many. But when you have the privilege of working in agriculture in a state that is as productive, high-quality, and diverse as California's, that opportunity to connect us to our urban populations through urban farming, through our Farm-to-School Program, it's really critical to the health and well-being of every California citizen.

So I would encourage people to look at the work that we have done to make sure that we are doing all that's possible to ensure the viability of small and large farms. Ninety-four percent of our farms are still family-owned. There's a misconception that they're not. Sixty percent of our farms are less than 100 acres and over 80% are less than 500 acres. So what we do for small, medium, and large might be variations of the same types of things: best practices on farms, ways to mitigate risk, ways to streamline and do smarter regulations, which we're trying to do with one small study that will be really soon really taking a look at the Irrigated Ag Lands Program and the Food Safety Modernization Act.

These are two of the more recent, big impact regulations that have also driven some of the increased cost for regulations on farms, and so trying to take a look at how there might be smarter ways to do more consolidated reporting, what could we do within the State Water Resources Control Board, which was a great partner for us on that, as well as in the Food Safety Modernization Program to try to take a more integrated resource management approach on programs like this and really think about regulations in a smarter way that the 10-acre grower, the 10,000-acre grower can all feel comfortable and confident that they're in compliance with this multitude of regulations that are coming from so many different agencies.

So with that, I'm open to questions, and I'm sorry there aren't more people here to ask them, but I know that the Assemblyman and you, Mr. Chairman, probably have a few questions of things I didn't cover. I'm happy to go into more details about our budget, but I wanted to cover those big picture items that you were kind enough to give me the time to talk about.

Well, thank you very much. And, again, we really have appreciated your leadership and just your professionalism as we've worked with you about the budget and about all things agriculture. I think I need to move closer after lecturing everybody else about getting closer to the microphone over the-- over the months. But we identified four questions for you and you answered all four of them, and I really appreciate that because we don't have folk-- we don't have to spend that time on that.

But, you know, the things about, what were the impacts from the federal administration cups, what are the macro and structural supply chain pressures we have, the food safety question, and then your overall thoughts. So I'd like to take this time to engage you on one of the things and sort of invite, hopefully, a partnership for a unique approach that I'm looking at.

Number one, we in the Legislature really value LAO's recommendations to us and more so this year than in the past because we're moving into a real structural deficit and we have a real problem. So LAO is making a recommendation that we not fund the Food-to-School Program. It's a beloved program. It's a beloved program in my district, it's a beloved program in lots of places. But that's what they're recommending, and it's because they have a very clear standard that they put out there, and it's basically all new dollars should be for absolutely urgent must-- you know, not nice to have, but must have.

And they've evaluated Food-to-School as a very valuable program, but doesn't meet the standard of must have, like emergency room care or those kinds of programs. At the same time, I know that the administration, the first partner, and the governor in particular are very, very interested in the Food-to-School Program. I had the pleasure of visiting probably one of the most successful Food-to-School programs in the State of California just last Friday.

I don't think that the timing of that was a coincidence, but the-- but it is a very successful program. What's unique about that program or what stands out about that program is that they are an elementary school with a food production kitchen, and they received the funding for the food production kitchen from the Farm-to-School Program. That's great, and it really shows.

And you can see on that campus the impact of this program on exactly what we're trying to achieve, which is disadvantaged community, get them to have better eating habits, get them really much more closely tied to the local agricultural industry that's around them. The challenge is not many of these elementary schools have food production kitchens. And so consequently, I have a lot of local farmers that are talking to me about the Food-to-School Program doesn't help me very much, because if the school doesn't have a food production kitchen, they only want to buy my fruits.

They don't want to buy my vegetables. And that is-- that complicates our goal because our goal with Farm-to-School is not just to change young people's eating habits, but to also try to keep local farmers around urban centers, and I completely agree with you. As we saw with COVID, et cetera, the local food chain will become an increasingly valuable asset for any country to have, for any region to have, any community to have if you could have locally grown food.

Just came back from London and saw how during World War II, everybody planted a garden. Everybody, every-- I mean, every-- the Buckingham Palace where all the flowers were got turned into a vegetable garden, you know? Every place, every square inch of land. That's what you do when you're in trouble, and there are lots of ways that we can be in trouble from a food production standpoint, and so having these local producers all there.

So I'm interested in trying to resolve this recommendation from LAO, resolve this very good program, but nice to have program, and the fact that it's very good for some schools, but--and some farmers--but it's not broad enough, and we're gonna have difficulty trying to get it to be broad enough.

The Local Food Purchase Assistance Program that I've been talking with farmers about actually connects the local farmer with not just the school, but also the food banks and these other people. And that program seems to me to be a perfect one to marry with Farm-to-School.

So this is something that would take some real coordination between us and this Budget Subcommittee and your department and hopefully conversations with the stakeholders, first partner and the governor's strong interest in this, but it seems like that program forces the local farmers to follow all of the food safety and the good growing requirements that you identified that are really important and sort of is the feeder program so that those farms are ready to supply schools with these so you can have these local farmers around there survive with the local Food Purchase Assistance Program and be ready whenever we can get more of these elementary schools to have production kitchens.

That's given how tight our budget is. Those two programs, I'm trying to find a way to marry them to some extent so we can maximize the impact for these farmers because when local farmers come to me and say, Farm-to-School Program doesn't help because they're not buying our vegetables, only our fruits, I don't think that that's what we want to have in terms of our goal.

So this is an invitation to work with you and see if there is some kind of marriage between these two that we could come up with. Now that's a very specific program, and we've got sort of the whole overview still ahead of us, and we'll talk about it. And I know that program comes up later--

Yes.

--but while you're here, I wanted to make sure I extended this invitation to you and let you know that's one of the things that I want to try to work on and see if we can come up with some positive solution with that.

Yeah. I appreciate that very much, and our part of the Farm-to-School Program is part of the bigger picture because of what has happened at the Department of Education for investment in school kitchens as well as culinary training because if you just put healthy food on a plate and it's not eye-appealing or tasty, and it's not consumed, it's not healthy. So I'm very mindful of this is, we're part of it because we were part of it specifically to make sure it was working with the farmers themselves.

And that's-- the regional navigators are part of building out that system to know who's got what capacity, what they need, and all of that. So I would say, had we not already been starting to make Farm-to-School investment, that helped equip more people to be able to go into local food procurement because of the training, but also, we have three tracks for the grant program.

One is specifically to farms to whether it's for food safety or other types of things on farm in addition to supplementing work for the School Nutrition Program itself and then the experiential learning. So there are aspects to it.

And what we have done initially with our evaluation, knowing that measuring health outcomes is a longer term process and you're not gonna get, you know, in year one, what was the health outcome? You can go to classrooms and talk to teachers and know immediately what the behavioral health aspects are for positivity, but we were measuring-- what we set out to do is measure, is this actually helping small farms that have been the target of this? And the answer is, yes, resoundingly.

We've met and exceeded those targets. And are they using the types of practices that, you know, we give an extra point on their application to? The answer is, resoundingly, yes. So we know that we've got this foundation in place to build out. The fact is that we have focused on Title 1 schools because we do understand the importance of serving historically underserved communities where maybe those children don't even have meals over the weekend. We know that's the important place to focus that attention.

And our-- if you see the map, and we've been able to provide maps to all of your offices of what's happening in your district, we are covering the State of California. I think we're over 40 counties of the 58 that have been recipients of this, and we continue to see growth of that as some districts take more time for planning. Some of our first ones are some of our smallest school districts in Modoc County, as an example. So we're able to measure those things.

It's the longer-term outcomes. We also know, because of other programs that I've been involved with called Brighter Bites and others, when you're educating the children, you're educating the whole family, and when kids go home and say, we had broccoli today and it actually tasted good, that's not necessarily what my brothers would have said about their growing up experience with broccoli in the wintertime when it was a frozen block of mush. Hi.

So I feel like there's more measurement to do, but we're committed to the evaluation to make sure the dollars are well spent, and this is the foundation to go to local food procurement, which is hugely important. The food banks themselves are better equipped with some of the COVID dollars that have given them additional warehousing, cold storage, which is really important to the produce aspect of this and the fresh stuff, as well as being able to be potentially positioned.

Some of them have incorporated commercial scale kitchens to teach people how to cook what's in that produce box. So they could themselves become part of the food hub system. We also, with funding from the Legislature and the administration, we were able to let out almost $14 million for a pilot program for food hubs, and we had 12 awards that we could make.

We had approximately $14 million. The demand for that was $140 million. So the momentum of actually investing in local communities to do this kind of work is there. We have to tie it all together. I would argue that having what we've started to do at the foundational part, meaning the farmers to the school districts, has given us a system.

And with some of the proposal that is before you on a couple of additional staff members that have the expertise of connecting small-scale processing, and there's a track to support that, we can really build out the system to make all of these programs work. But our priority is the Farm-to-School Program--

--and the certainty of having planning dollars to go forward.

Sure.

And how about the local purchase?

Yeah. I take nothing away from that. Of the $90 million the State of California received for that program, we got a little over $11 million to the Department of Food and Agriculture for Local Food Procurement because DSS was putting it down into other forms. So we've had experience with that in the last couple of years when that program was available, and there's huge momentum at the federal level, bipartisan support, and across all my colleagues in all states who saw benefit from that to get that included into the Farm Bill because right now, it does not have funding.

It's in a proposal in the Farm Bill for authorization so that they could use other funding if they have it, but any program that wasn't specifically authorized in the Farm Bill has been discontinued at USDA.

So I'll look forward to-- because we can't--

I'll work with you till the last day I turn out the lights in my office and look for the new person.

All right. I will look forward to doing that. I'm gonna jump on just a couple other quick things, and I know my colleagues have some questions for you. Appreciate your answer about both the impact of sort of the federal government and the macro side of things and stuff.

Yeah.

Help me, from your perspective, rank the threats. How much have the tariffs and the international reaction to tariffs affected agriculture versus low prices, rising cost? Try to put-- if you could put those things and then just sort of international relations-- you know, our international relations with Canada and Mexico are certainly within a different spot than they were. How much is that affecting-- this is mostly our larger producers.

Could you rank-- could you put in some kind of priority order what you see as risk? I'll give you the things, you know, sort of water cost, tariff impacts, international sort of irritants, you know, that are out there, overall rising input cost, and then low prices maybe due to more international competition or maybe due to some other things.

Yeah. I'm going to be-- I'm gonna be candid from my perspective what I see as far as increased cost, whatever they may be, and all of the inputs-- you know, every year there's always an increase for everybody else in the food chain. The hard part is that the farmer oftentimes is not in a position to pass that on. So we all know that about agricultural economics and the elasticity of agricultural economics.

Obviously, right now, what has happened on fertilizer and fuel costs in particular, fuel costs were most immediate and highest, but it takes a lot of energy to run a farm or a processing plant, anything in the food system, and fertilizer prices, as well as concerns now the longer the conflict goes on, the concern about fertilizer at al, you know, we have big goals for composting, but it's gonna take a while to get all those systems in place to actually supplement all that fertilizer, but they're-- you know, that's just a fact of life.

I'm proud of our environmental standards because it it is something that I think sets us apart, and when we sell so much fresh, I think that's really-- that aligns with the values of consumers, not just here, but around the world, as well as for our labor standards. It is it is challenging, whether you're small or large, to pay an hourly rate that is more than many other states or many, many other countries for even daily wages, and that's just-- that's just a fact of trying to remain competitive.

We also have-- you know, there's still even with the issues that are going on with the increases in pay that have happened, we still see huge vacancies. There's more farmers moving to an H-2A Program, which allows for temporary worker permits. But the real need here is looking into the future, what can be automated that would improve precision, efficiency, and over time, lower input costs.

And what I'm especially pleased about, and I didn't talk about at all today, is Jobs First, where agricultural productivity, technology, and innovation is embedded in eight of the 13 regions that make up our Jobs First Plan, and understanding the need for automation and new technologies and not leaving farm workers behind by not also focusing on current training now so they're the ones that are operating the new technologies.

And the AgSTEP Program is a remarkable program. They've already had hundreds of graduates from that, coming primarily from the farm worker community, the immigrant community, but not exclusively. And the new technology is attracting younger people to agriculture, but at different places throughout our supply chain. So it's creating opportunity, but we don't wanna leave anybody behind in this transition of automation and the need for automation to be competitive.

Thank you. I'd love to have the whole rest of the morning talking with you, but I've got to go Assembly Member Connolly and then we'll go to Assembly Member Gallagher.

Thank you, Chair. Appreciate it. I have to actually leave in a minute, but really wanted to say always a pleasure to hear your perspectives. Thank you for the working relationship you have with our offices. As you know, I'm particularly interested in the California Nutrition Incentive Program, or CNIP, Market Match, and just had a few quick questions. Is a program gonna be funded for this fiscal year?

It will not. We would have needed state dollars to be able to draw down federal dollars.

So that program is not gonna be funded as things stand?

Not in the-- not in the budget as it stands.

How much would it cost to fund all the markets in California that are part of the Market Match Program?

All of the markets that are part of that?

Yeah.

I think at our peak, there-- because of a budget that was a multiyear budget a few years ago, there was a total amount that allowed us to draw down dollars in two years. I have the person who manages that for us. But I think at our peak, it was $30 million, which was $15 million from state dollars that we were able to draw down, $15 million from the feds.

And I think that was at its peak. Yep. And I'm sure I will be corrected.

Okay.

All right. Yeah. I know. If we can--

I come here with great humility.

Maybe on a broader perspective, if you could answer, though, how has the Market Match Program helped farmers' markets expand food access in their communities? And, again, this is the program where, effectively, it's like--

You double the coupons, yeah.

Yeah. Healthy foods, kind of win-win in terms of supporting economically our local markets.

Yeah. So there's no doubt. It is wildly popular and it is joyful for farmers as well as the recipients to be able to go to market and buy what they want. There's nothing built into that program to evaluate actual consumption or behavior change as far as taking it home and preparing it and all the steps that go into that. So, I wouldn't have a lot of additional information, but we know intuitively that access to those products is-- those coupons are used as are the senior farmers' market coupons.

So we know that there's benefit at least with the cash transaction directly to the farmer and direct dollars to farmers. That's why Farm-to-School is so important as well is that it's dollars in the local economy directly to the farmers. So we know there's benefit to that. I just can't speak to down the chain of it.

Right. And then more broadly speaking, how are Prop 4 dollars being deployed to further climate-smart sustainable agriculture?

Yeah, yeah. So with-- we were able to-- because of what was in our statute for our SWEEP Program, our on-farm water use efficiency program, we've already let those dollars out this year, and we are in the process of letting out the Healthy Soils dollars. I have the list, if I can find it. We are proposing the Tribal Sovereignty Program, the Mobile Farmers' Market Program, and the year-round farmers' market will be funded this year. I don't have that piece of paper in front of me, but I know it's in my notes here somewhere. Prop 4 dollars. I'm sorry. I should have that at the top and I don't.

Help is on the way.

Yeah. While I'm looking at it. I don't have the Prop 4 page. Oh, thank you. I just wanted the list. Just-- yeah. We were able to fund SWEEP, Healthy Soils, Urban Ag, and Fairground Emergency Response. Those are all in process this year as well as the Invasive Species Fund. We have approximately $74 million in our proposed budget.

So these right here, I thought this was the or half of it was that.

Good morning, mister chair and other committee members.

Sorry. I'm so sorry.

No worries.

You would think after all these years I could do this better. Sorry, mister Gallagher.

And, yeah, I've got it. I know there'll be some thoughts I've gotta run, but, yeah, if you wanted to quickly

I'm Metzayo on Department of Finance. Yes. The climate bond allocates 300,000,000 for Climate Smart Agriculture over the lifetime of the bond. The funding is allocated across programs administered by the Department of Food and Agriculture, the Department of Conservation, the Department of Community Services and Development, and the Department of Education.

The budget act of 2025 appropriated 153,900,000 across these departments with significant investments in the healthy soils program, the state water efficiency and enhancement program, urban agricultural projects, and invasive species work administered by CDFA, as well as farmland protection and restoration to the Department of Conservation.

The governor's budget includes an additional 88,700,000 to support the continued delivery of these programs with notable new proposed investments in regional farm equipment sharing, tribal food sovereignty, and improving land access and tenure for socially disadvantaged farmers, ranchers, or tribal producers. I'm joined by representatives from the department's allocations in this chapter, and we are available for any questions.

Thank you. Assembly member, we will be hearing this item later. I know you'll be gone.

Yeah. That's why I brought it up now, but looking forward to a deeper dive, and I know that there will be some follow-up questions.

Alright. Great. Thank you.

My apologies for not being able to answer succinctly. Follow-up.

Assemblymember Gallagher. Yeah. Thank you, mister chairman. So thank you, madam secretary, for being here today. Appreciate your work over many years and been happy to work with you on many items.

I think on the on specifically to the to the farm to school, I've been thinking about this a lot and I think we have macro and micro. Right? I mean, our markets in agriculture are really set up for macro.

Yeah. Exactly.

And that's important because we do grow we grow food here in one of the unique places in the world that can grow a lot of variety of food for a world market. And there are certain places in the world that they cannot grow nutritious food. So they need us. Right? So that's a good thing.

Right? We do need to be growing on a macro level, which is gets into one of my questions, which is you brought up China. And China has not been a good partner on this. I mean, we have China does not take California rice. Right?

We've been trying to get in that market, can't get in there. Right? They don't take a lot of our our nut I know of our nut product products. Right? So we do need to establish a better trade partnership there.

And and largely, they've been excluding us. One of the largest growing middle classes in the in the world, right, that want our that probably want our products, but we can't get them in there because of the exclusions. So what can we do to better open up that market, you know, from your perspective?

Yes. So this is where the market access program dollars that we've been able to access historically have made a big difference for us to do that work. And a lot of that work is regarding emerging markets. We view Vietnam and Thailand and Indonesia and Malaysia as emerging markets where we're starting to lay that groundwork in in cooperation with our other commodity groups who spend a lot of time.

A lot of these markets are initially opened by some of the basic commodities that you you and I are both very familiar with.

But dairy, in particular, is always one that's in that early phase of opening up markets to expose people to to the quality and the diversity of what we can do. And almonds, walnuts, pistachios in particular, because they're so unique and a center of excellence for California, have very robust programs paying attention to those things. India is a very important market, especially for our tree nuts and especially for walnuts and I have to call that one out because it's so important for them. The Middle East has

We're almost there.

I know. We were so we're still there. We're I don't I never give up. Some of these markets just take a while

And there are the geopolitical negotiations that I'm never privy to. But the Middle East has been becoming very important to us, Northern Africa, Southern Europe, but also South America. South America is not necessarily a place where we've seen as many opportunities, but some of the free trade agreements that have been put in place in the last decade are showing that as if their economies are growing, they are able to source more products that they don't grow themselves.

You know, we take their coffee, hope that they take some of our tree nuts and other things. So those are the places to focus, but we also do not want to walk away from our two of our neighbors and most important markets.

Canada, in particular, is our number one expert market for ag crops as well as Mexico continues to grow, not only as a competitor but also as a home for year round production for some of our California families. I don't know that I'd answer that.

Decision. No. I I think that's true. As long as they treat us fairly.

that and I think that's the key thing. Key. So then moving to the micro, that's what that was the macro. The micro is something I think we need to develop a whole lot more. Right?

And that is what we're talking about, like Yeah. You know, farm to school is one of those things. Yes. One. Yes.

But farm to local. We grow, you know, so much in California. Right. And it's crazy to me that, like, those products aren't ending up in our schools. You know, those products aren't ending up in our places of higher learning.

You know, it's no one. UC and CSU, very small budgets very small budgets for locally grown food that could be delivered straight to them. And so here it is. It's right here. It's close.

Right? If if we develop and what we're lacking, I think, really is is not, like, more people administering a program. I think, actually, what we're lacking is the infrastructure. Infrastructure. And so we need hubs.

And I think that you brought it up, like, how do we you know, I think the key here is gonna be how do we grow more food hubs. Yes. I'm actually having to ask, make a budget request for a food hub in Marysville. Right? But I just feel like that's where we should put Exactly.

Because and this is the key. The hubs is where, like, farmers then could go, okay, I can take

there and I'll get I'll get paid there. There's the hub and then they're the ones that distribute it straight to the school, to the, you know, to the local consumer, to the different folks that might wanna so we gotta create those markets and we gotta make it easy for the farmers. Some of the things that have Has

it's got to be convenient. Yeah.

Is it certification sometimes can be cumbersome especially for small farmers? So I think we gotta work on, you know, putting the investment into building out those hubs, having hubs all throughout Yeah. The state of California. Yeah. So maybe if you could just speak a little bit to that.

I really appreciate that because we were blown away by just the demand when we did put out that $14,000,000 for the food hubs. So it shows that people have seen the wisdom of this and they are ready to do that. And there is a track in our farm to school program that can provide some funding to food hubs, but that having that standalone pilot really proved what the demand is for that.

We are also in the process because of these recent investments, including what happened with food banks who could be positioned to be a food hub. We are in the process of working with roots of change in the Public Health Institute to do a mapping of where our investments have been so that as dollars might come back into budgets, we can show where the gaps are and where where we've been able to really follow success stories to show that this is a model that works.

So I'm very optimistic. I yeah. I've been through really severe budget cuts my first three years in this position that I'm very optimistic that we'll have opportunities for new dollars to come into these programs, whether it's at the state or federal level because of how the rest of the country has also seen some of this need and try to get it into the farm bill. Okay.

You know how many food hubs we have currently, like, statewide?

I know that we funded a dozen. I don't know if we have that count here because it's being mapped out as we speak, but I think someone from the program might be able to supply some additional information.

Okay. Yeah. If they can just get that to me, I'd just like to see where we're currently.

Gives me an excuse to come visit.

Okay. So

Thank you, madam secretary.

I think we're ready to move on. And thank you very much. We're we've spent an hour. We could've spent I'm sorry to take Could've spent three hours. Right?

With this. Just there's just so much so much in terms of value that we have. But I know that assembly member has two issues today that are important to her. She they're both items that are going to come up here later. So

So I know we touched on them a little bit, but I'll hold until we get to those agenda items. But I do wanna thank you for your service and just being a wonderful partner, and I've enjoyed our conversations in our office here. They're always very informed and always willing to be collaborative. So thank you.

It's been a pleasure. It's been an honor and a pleasure. Thank you very much.

Great. Thank you very much. And now we only have this room until 12:30. So we'll go back to our please try to keep your answers. Get right to the point with your answers.

Try to keep those direct as we move forward. And I'm now going to adjust the agenda again because Assemblymember Pete Norris, we had mentioned we were holding item one until she got here. So we said we were gonna do item six, but now we're not going to do item six next. We're gonna go to item one because I don't know how long we're gonna be able to keep you.

And so, item one, if people would come up for item one, that's the elimination of the vacant positions.

Department of Fish and Wildlife, Department of Parks and Rec, and the Department of Food and Agriculture.

And, I missed a few things, but we will always ask the, presenters to identify themselves when they begin to make their presentation. We won't be taking any votes on any agenda items today. After all the items are heard, we'll take public comment. For members of the public who wish to provide public comment, please limit your testimony to the items on the agenda.

Each member will have one minute to speak, assuming we're not being thrown out of the room at 12:30, then we'll have to cut that down. And we have adjusted the agenda more than once already this morning. So with that, we're at item one and go ahead.

Did did you want finance to go first or the LAO? I think

I think we want the LAO to go first. Right? Okay. Thank you very much.

Good morning, mister chair and members. I'm Sonja Petek with the Legislative Analyst's Office. So I'm I'm here to talk about the issue of the proposed elimination of vacant positions. And if

you could turn to page four in your agenda, there's a helpful chart in the agenda that helps us to walk through this issue. So I'd start by saying at the May revision last year, the governor had proposed eliminating 6,000 vacant positions across state departments as a cost savings measure. This is the top row of the figure. However, because this was proposed in May, it didn't give the legislature a lot of time to think about the proposal or to consider the potential impacts of the proposal.

So if you look at the next row, this reflects what was the final agreement in the '25, '26 budget.

It effectively eliminated almost 5,000 positions and then allowed the legislature through the joint legislative budget committee to review about a thousand positions and indicate whether it concurred or whether it indicate whether it did not concur with the elimination of those positions. So specifically, the thousand positions included all of the proposed position eliminations in nine departments including fish and wildlife, perks, and food and ag, the departments before you today, as well as positions associated with the implementation of legislation chaptered in 2022 and 2023.

If you look in the next row, after a thorough review, the JLBC did not concur with the elimination of 650 positions. And as shown in the final row, a 174 of these 650 positions are in the three departments before you today. So what does the governor's budget include?

So in January, the governor had proposed eliminating all 6,000 positions going back to the top of the

figure. And for today's departments, this would mean annual savings of about $18,000,000, most of which is from the general fund, 15,000,000. Next, I wanna talk about why the JLBC did not concur with eliminating 650 of these positions. The JLBC considered a variety of criteria across departments such as, were these positions originally authorized to improve program outcomes, do they perform important public safety functions, etcetera. In addition, the JLBC considered factors unique to each department.

So I'm gonna start with the Department of Fish and Wildlife. The JLBC did not concur with the elimination of 77 of the proposed 164 position eliminations. These positions serve a number of important purposes at the department. They are game wardens, permitting staff, staff supporting the cutting the green tape initiative. The JLBC was also concerned that cutting these positions would affect efforts to close Fish and Wildlife's known service based budgeting gaps.

And indeed, as shown on pages, six and seven of your agenda, if the full number of eliminations proposed by the governor took place, those would exacerbate many of those service based budgeting gaps. Moving on to the department's Department of Parks and Recreation, the JLBC did not concur with the elimination of 62 of the 85 proposed positions.

The JLBC identified positions that if they were eliminated, they would negatively affect the department's ability to protect environmental, cultural, and historical resources, provide public safety, address deferred maintenance, or provide interpretive or educational services to park visitors. Moreover, the JLBC was concerned that cuts could negatively affect the 2018 fixing state parks initiative. Moving on to the Department of Food and Agriculture, the JLBC did not concur with 35 of the proposed 69 position eliminations.

The JLBC identified positions associated with fiscal and program oversight as well as with pest management and invasive species programs, including seven positions to implement the broom rate program authorized by AB 402 in 2023. So moving on, I'm going to provide a few, comments about the LAO's assessment of the governor's proposal.

So first, to the extent that the legislature wishes to retain rather than eliminate the positions identified by the joint legislative budget committee, this would erode savings built into the governor's budget, and the legislature likely would have to find a similar level of savings elsewhere in the budget. In the context of finding budget solutions, we would note that all of the positions proposed for elimination at parks at the Department of Parks and Recreation are funded by the general fund.

This makes things especially challenging for the legislature because retaining them would erode close to 9,000,000 in general fund savings.

For our Department of Fish and Wildlife, we note that the governor's budget proposes retaining Fish and Wildlife's special funds even as it eliminates the positions supported by those funds. Consequently, if the legislature wishes to retain the 77 positions identified by the JLBC, it would result in a loss of savings of about only on the general fund side of about 4,600,000. At food and ag, the assumed savings includes 3,000,000 special funds and 1,700,000 general fund.

So if the goal of eliminating positions is to help address the structural budget deficit, eliminating the positions supported by food and ag special funds wouldn't really help. Our second point is that eliminating positions could have undesirable program impacts.

These positions were established to serve important functions as the JLBC found in its, pretty thorough review, and eliminating them would have trade offs. Our third point is just that just because a position is vacant doesn't mean the position is not important. Positions can be vacant for any number of reasons, that have nothing to do with programmatic needs, such as the position may be hard to fill because it requires special skills or training.

So at the end of the day, what our office would recommend is that the legislature keep the special funded positions identified by the JLBC at Department of Fish and Wildlife and at Department of Food and Agriculture. They serve important functions and eliminating them could have negative program impacts.

Moreover, eliminating them would not really help with the budget situation. For the general fund positions, which includes all 62 at parks and about 40% at fish and wildlife and food and ag, we recommend that the legislature weigh the importance of these positions against other budget priorities. The same rationale for keeping them applies, but we understand that the state is in, you know, tough budget times and retaining and filling the positions would have an impact on the general fund.

Thank you very much. Department of finance.

Thank you. Stephen Benson, Department of Finance. I will do some contact setting to help, I think, with the rest of the conversation and questions in the agenda, and then I'll try to address a few of the questions in the agenda upfront. So just setting context, this exercise started off with a realization that the state has about 40,000, vacant positions annually, and that number has been pretty consistent, pretty steady for several years.

Obviously, the which positions are vacant sort of fluctuates from year to year, but the total number has been relatively steady statewide for several years.

And within departments individually, there's a fair amount of consistency as well. It varies a little bit from department to department, but there's a lot of consistency in terms of what those vacancy rates are. What that results in is you have a whole bunch of funding that is authorized for positions that's not being spent on those positions because the positions are vacant. Also, the work that that those positions were intended to do is not getting done because the vacant the positions are vacant.

Funding is used by departments in a number of ways.

Sometimes, there so we don't do annual cost of living adjustments for things like rent, utilities, fuel costs, things like that. So in some cases, you have departments that in order to meet base operational needs, there's a there's a necessity to keep some positions vacant. They need that funding to meet those needs. Other cases, because you have positions that are hard to fill for a number of reasons, agree. Some of them are in remote locations.

There's housing challenges, all sorts of reasons. They can't be filled, and they maybe have been vacant for a very long time. Sometimes there's opportunities to contract to fill some of that workload. Maybe he doesn't do all of it, but you can address some of the workload. There's a number of reasons that that we we maintain that flexibility for departments to meet their operational needs.

I think the other thing to note is by maintaining all of the vacant positions, we do annual employee compensation adjustments. If a position is vacant, that adjustment continues to happen. And so this pool of funding grows annually, And, you know, the again, the vacancy rates are maintained at a pretty high level. And so you've got the sort of ever growing pool of what ends up being flexible administrative funding.

And so the idea behind this exercise was to say, we don't wanna take away all the flexibility, but there's a better, more transparent, efficient way to utilize some of this funding.

In our current budget situation, we should score some of that savings.

K.

So that's really what this really gets to in terms of, purpose. But the way that the drill was act was administered, we're also trying to, getting some efficiencies there, maintain some of the administrative tools that we have so departments can operate their budget. So one of the questions in here is what was our criteria for deciding what positions to, to eliminate. The at a high level from Department of Finance, we didn't really put a lot of criteria on it.

There were some targets set, and we said the you should develop plans for how you can reach these targets, and you should try and minimize disruptions to public service.

And and we gave a lot of discretion to departments to work through how best to do that. So folks went and did that. There was both iterations of reviewing it, some reductions, changes, some things were, excluded, some you know? So there's a number of things that were done as we went along the way to try and tailor that down, but with a overall criteria of minimizing impacts to public services.

And each department can talk about how they went about their plans and and strategies for doing that, but that's sort of the overall guideline that was provided up top.

And then one of the and so in no case, the original targets were generally speaking about 50% of vacancies. I would say that by and large, in most cases, after the iterations of that, I don't know that many departments are actually at that at that original target amount. There was exclusions and things done that adjusted down from there. So, again, maintaining a lot of the flexibility.

The other thing that I would note is that departments have the ability, especially in the positions piece of this, have the ability to reclass vacant positions.

So for example, I think we'll talk more about this later, but Department of Parks and Rec has 627 rangers. Of that number, there was a 147 vacancies at the point in time when this drill was being done, and 15 are scored as base vacancy elimination. So that leaves a 132 ranger positions that are still available to be filled as we can fill them. So there's still a lot of flexibility to fill those.

If at some point we get a 132 filled and there's no others that come vacant to sort of backfill that, we can have conversations about whether or not 15 need to get restored.

But there's there's still a lot of flexibility there. And, even for departments where, certain classifications may be slated for elimination, They have the ability to reclass positions administratively. And so let's say you ran out of vacant positions in one classification, but you've got vacancies in another one. If this if this classification is the highest priority, well, then you can reclass and you can still fill those to fill your priorities.

K. Anything else major, you wanna point out?

Well, if you wanna, I can hit on a couple of the general questions upfront or we can wait. Up to you.

I think you should wait because, we wanna try to make sure we're focused on the efficient use of our time here.

I will stop there and be available for questions

Just just like we're going to focus on the efficient use of every dollar we give to to to this department. Excellent. And so we've been oh, I'm gonna turn this over to Assemblymember Petrie-Norris for the first question since we held this item for you. Right.

And actually, CDFW may wanna come up as well. CDFW? Okay. Alright. So this is kind of an unusual line of questioning.

I think often we're asking you to justify why you wanna spend more money. And in this case, I think, building on some of the concerns raised in the LAO's analysis, my line of questioning is actually very much focused on, why we're cutting some of these positions, particularly at CDFW. Right now, California, we are trying to build record number of housing units across the state of California. We are transforming California's economy, from a fossil fuel economy to a clean energy economy.

We're trying to cite and build, like, just enormous quantities of transmission infrastructure and clean energy projects.

We're transforming our water infrastructure, our transportation infrastructure, and we're trying to do this stuff on timelines that we've actually never delivered anything on ever. In every single one of those examples, CDFW has to issue permits.

And as we talk to housing developers, as we talk to clean energy developers, And frankly, as I talked to the department themselves, they've said that a major bottleneck right now is under staffing for the folks that need to issue those permits to ensure that we can achieve all of those goals while protecting, our natural resources as well. So I guess my question is, and particularly given the LAO's, I think very excellent analysis and explanation of the sort of minimal savings.

I guess, my first question is to Department of Finance.

Why do do you think that's a good idea for us to save, you know, such little money when the impact seems to be so great and so negative?

Andrew Hall with Department of Finance. As as we mentioned previously, the the positions were part of the budget resiliency exercise, and departments were given flexibility to prioritize those. And this this included both general fund positions and special funded positions. And sorry. Can you repeat the second part of that question?

I was on my way up to the table.

I guess, Like, why does that it just it seems like the general fund savings are trivial and the policy cost is enormous. Why what are we what are we getting by making these cuts, really? It kind of I guess it sort of seems to me to be penny wise pound foolish. So curious if you have a different assessment and why.

Yeah. I would say I would say that, you know, each department was required to participate in in meeting these savings. It was something that's needed to right size the the structural deficit, and Fish and Wildlife was no different than the other departments in that regard.

Okay. Yeah. I guess I would just say I don't think the fiscal justification holds up on as we more closely inspect it. And if we're really looking I mean, how much are the savings even in Fish and Wildlife? It was, like, $4,600,000 or something like that.

I think if we need to find $4,600,000, I would be happy to identify other departments where maybe we could cut a few more folks. But, you know, even by, I think, CDFW by your own assessment, the department is meeting 40%. Am I correct in this?

Yes.

40% of its permitting and environmental protection mission. So that feels like we need to be doing more, not less. And so if these cuts were to go through, what categories of permitting work will the department no longer be able to perform? Like, what falls off the list?

Chair, assembly members, Meghan Hertel, director of

Closer.

Oh, still not close enough. Okay. Meghan Hertel, director of California Department of Fish and Wildlife. Thank you for the question. I'm actually gonna turn this over to our deputy director of fiscal services.

He was integrally involved in both the assessment of what to prioritize for these cuts and can talk more about that.

Chair, some of the members, Dan Reagan, deputy director of fiscal service division. Through the prioritization

Closer. Closer. Closer.

Okay. There we go. How's that? Alright. Sorry about that.

So through the prioritization, we looked at mission critical positions as well as service to the public, including permitting. Through the reductions, the 4.12 eliminated 70% of the department's eligible vacancies during that time, and it was 80% of the department's general fund vacancies. So prioritization came to a point, things had to get to your point.

Through the permitting pieces, we are committed to continuing to meet our permitting obligations as well as CDFW maintaining the flexibility of maintaining the all of our special funds does allow the department to reprioritize other vacancies as department of finance referenced as well as higher limited term. There is a challenge to hire in limited term staff though.

Government code stipulates that limited term staff are for temporary staffing needs and can't exceed twenty four months. So at that point in time, the time that went into training those staff, you lose and you have to kind of start over if that workload still continues to be a concern.

Okay. And I think the other I think it's the other really salient point for committee to consider and the LAO, I think you did make this point, is it this is not even all or primarily general fund dollars. A lot of these positions are actually funded by fees that are paid by developers. So if we're we're talking about I think it's, like, $19,000,000 in general fund savings, but the remaining $25,000,000 is special fund money that fee payers have contributed to do this work.

So I, you know, I certainly appreciate the need to tighten our belts, identify opportunities for savings, but particularly with the CDFW cuts, I really do not think that this is the the right decision and, you know, certainly support, I think, the LAO's recommendation that we reject reject those proposals.

Thank you, mister chair.

Thank you very much. So I wanna start with what you just brought up, which is how how is it that CDFW gets to keep the $11,000,000 for the special fund positions even though we're eliminating positions? No other department does that. Just seems unusual. So I don't know if it's Department of Finance or who is the best person for me to ask that question of, but I'll let you guys decide that.

Sure. And Andrew Hall with Department of Finance. As you noted, last year, we were going through this exercise of, you know, reductions in both general fund and special fund exercises. After enactment, we went back through. We listened to the feedback from the legislature.

And in recognition of the service based budgeting gap, that it would the decision was to keep the special fund at the levels that they were previously. And then as mister Benson noted, this existing pool of vacancies, even after you do the vacancy reductions, can then be utilized to be shifted over to some of these other activities. I would say we were looking at this more at a macro level. It it's fair to look at a specific position and what its duties are right now.

But if there's an equivalent position elsewhere and the department determines that, you know, permitting is a priority or that they need to move resources around, keeping that special fund allows a little extra headroom for them to move positions between activities.

And why CDFW only and not the agriculture department, etcetera?

I think for CDFW, it was definitely in recognition of the service based budgeting. If you're talking about some of the other special funds in our areas, the water board would come to mind for that. Their fees each year are based on their level of appropriation. And so, you know, with the employee compensation adjustments each year, if there's budget change proposals that come through, they work through their board process and actually go through to raise their fees.

In the case of the efficiency reductions, what we're seeing is that there's already offsetting reductions where if it was anticipated that a fee increase was gonna be 5%, it's coming down by a marginal amount.

In some cases, no fee increases are needed. And so it's actually having a different type of impact than it would for fish and wildlife.

Okay. Interesting analysis. Overall, Department of Finance, I think you addressed quite a bit of of my concern about, you know, are we cutting a position that's really critical, but we just couldn't fill it for the last year because there was nobody qualified out there. And now we lose that critical position.

But I want you I believe what I've heard is you feel confident that there's still enough flexibility there that if this was position was really critical and it got cut, that position could still be filled. Correct?

Yeah. Absolutely. There's the flexibility to to fill it with whatever vacant positions are available. If we get to a point where those vacancy rates get really small and we need to look at restoring some positions again, we have that conversation. But while we're maintaining high vacancy rates, we feel like it's more efficient to keep that a little bit narrower.

Great. And then I just come back to my only other question here, and I wanna come back, I think, since you were addressing this. Cutting special funds could potentially mean that we're collecting funds from people who are paying fees for service and we're not delivering the service because we cut those positions. So cutting general fund dollars clearly saves general fund dollars.

Cutting special fund dollars may not if we're either not delivering the service or what we're doing is we're slowing down delivering the service and the service was tied directly to that.

So a lot of times, those funds aren't available for something else. They would only be building up reserves. So give us your rationale for why we should cut special funds that may not, as LAO points out, have that much of an impact on the general fund. Alright?

So I think the analysis for special funds is a lot trickier than the general fund itself. Special funds collect their revenues in a lot of different ways, and so the way that the reductions can impact a particular special fund varies. Sorry. Varies quite a bit. But I think by and large, the way we looked at it is while the priority the highest priority was general fund savings, we were looking at overall budget resiliency going into the future.

And in some cases, we have relied on, special funds to help out with general fund resiliency. I don't think it's a secret to anybody here that the the the state, through discussions with the legislature and administration, has used, loans from various funds and things like that to bolster the general fund resiliency. Don't love doing that, but that's a tool that has has come up from a lot of different areas, a lot of different times, and it's been relied on a lot of different times.

So overall budget resiliency does need to look at special funds as well. It's not just the general fund.

Also, you know, just from the larger perspective of affordability, we're as mister Hall alluded to, we're sensitive to what sort of additional cost increases there are through all these different fees as well. So to the extent that you can do some things to control the rate at which fees need to increase, that helps overall affordability.

It's so I think those are the few of the factors we took in into consideration when it which, you know, the these control sections are written so that they're not limited to general fund. They instructed finance to look at all of the budget items. And so we looked at all of the budget items, and we believe that there are budget resiliency benefits that come from both special funds and the general fund.

So I share, semi member, Petrie-Norris' concerns about our desire to accelerate permitting and the impact. So I hope that that message has been heard loud and clear, particularly from our new administrator in terms of making sure that this happens. Where we go with this, I think LAO's made some sound recommendations to us. So I think we'll have further conversations about the special fund cuts and when it comes to the permitting, even the the general fund cut there from that standpoint.

So we appreciate that you've been able to hear that. And now I see assembly member, Wilson has a question or comment.

Thank you. And I too concur with my colleagues and the chair around, these positions and the need for them. We have a lot of challenges ahead, and I think that ensuring we have proper staffing, to help us meet those challenges in this particular area is key. I wanna, circle just deviate for a second to make sure I understood something that you said during your, remarks and make sure I understood that clearly that, this is centered around the flexibility in spending.

And I wanted to make sure I understood that currently or pre this review of vacant positions and should they be eliminated or not, that they essentially were placeholders for budget and and allowing the use of budget on outside of positions, whether it be contracting, increasing salary in other areas, or just using them in general.

And I wanna make sure that was I understood that accurately. I didn't wanna walk away with the, the wrong assessment of your testimony.

Yeah. So when the positions are vacant, that funding is still in the department state operations budget, and it's available to them to use on, you know, valid state operations needs. And so in some cases, because we don't do, like I said, annual increases for things like rent and utilities and fuel costs and things like that, Some departments have maintained certain numbers of positions vacant because that funding is available to meet other priority operational needs.

So that would mean across thank you. And so that would mean across the but if there's a vacant position within your department, it isn't does not stay on the salary line. It could be used anywhere within the department. That's the current practice.

So the the where it's allocated in the budget doesn't change. It's still an authorized position. So the funding still if you would like to go and look at the, you know, the budget display that we put in there, the funding would still show up under personnel services because it's tied to that authorized position. But if that position is not filled, departments have the flexibility to sense to spend that money on other operational needs.

Okay. So I just so I'm getting it real simple just to make sure I understood you. Yeah. Is that so if you had a $100,000 budget, we're using weird numbers, and you had a position that was just $10, As long as they didn't exceed the $100,000, if that position was vacant, they can use that $10 anywhere they want if the position was vacant.

As long as the position's vacant, they yeah.

Okay Thank you.

And and I guess, not to take up too much time and we're sensitive that. But in the past, we have done some budgetary exercises where what we've done is gone in in recognition of that and said, hey, to try to true up and try make your budget more transparent, maybe we keep the dollars, switch it to OE and E costs, and eliminate the positions.

That way, you can show that you're spending the money on what you're spending the money on as opposed to there being a vacant position. So that we have done various exercises throughout the years to try and true some of that up.

But their flexibility exists currently?

Yes. It does. Okay.

Thank you. Concerning, but thank you.

Thank thank you very much. Spent twenty years as a county supervisor and I've found after a few years that I couldn't go in and micromanage every change in every department as much as I'd like wanted to. Right? But I do believe in the concept of you just gradually squeeze down, let the managers figure out what to do, and then you gradually squeeze down, let the managers figure out how to do that.

With the exception of the permitting thing, I think the concept here of eliminating vacant positions is a way for us to begin to deal with the structural deficit that we have coming forward.

And quite frankly, we're in agreement on out of 6,000 positions. We're in agreement on, you know, virtually all of them except for a small percentage. But the small percentage is important to us as as we go forward. I have a question for Parks and Rec, but I think that we have a related comment. So let's go ahead and

Just one one additional comment. So, you know, I think that the, approach department of finance that you described in terms of sort of framing the conversation and framing choices, I think that makes sense to do kind of a, alright, every department needs to take a haircut. What does that look like?

But I I don't I think that's different than then getting dug in to that as the final outcome because I feel like, you know, talking about doing that for a department that by its own assessment is meeting 40% of its very vital mission, that seems crazy to me. So it seems like in the case of CDFW, particularly, we're, like, robbing Peter to pay Paul.

So I think we need to identify other departments perhaps that could take an additional haircut when we're looking at those kinds of trade offs is what I would say.

Great. I'll just, piggyback onto that and that is what I found is that the smaller the department, the less you engaged in this whole everybody a 5% across cut across the board of a department that's very small is a huge impact versus a 5% cut across the department that is very large. And I think that's part of what you're talking about here also. So I think there are some specifics that we will definitely be be questioning.

Just just for information purposes, parks and rec, my one question I have two questions, but one of them is the loss of the park rangers and the impact of the loss of the park rangers.

What do you what what do you see as the impact we hear that you have a 136 positions, vacant. So will these 14 positions have a significant impact on on on parks?

Yes. Thank you, mister chair. Liz McGurk, chief deputy director at, State Parks. And, yes, for the peace officer, positions that are proposed for elimination, the department definitely took a, critical look because our goal with this exercise was to maintain visitor services, maintain critical public safety.

So when we looked at our existing vacancies, which is roughly, you know, a 150, and then we looked at the the time it takes from the exam to training to our academy process to actually filling the positions and our ability to host those academies, which is roughly about up to 50 cadets per year.

We looked at the time, and so those 15 positions would not have been filled in the near term. And so that is why they were they're on this list of proposed elimination. Our goal right now is to up our recruitment rates, really look at ways to increase our academies so that we can fill those as existing vacancies that are critical for us.

So you don't see any short term impacts?

Not in the immediate. No.

Thank thank you very much. How about the the loss of the maintenance and management positions? I'm particularly concerned about the deferred maintenance. We had a real crisis six years ago or so. We've put some real energy and trying to decrease the deferred maintenance problem, which is a way to invest for future generations to have lower cost in the future.

What's going to be the impact on deferred maintenance?

Yes. So similar to the exercise with the peace officers, when we were looking across our maintenance positions, there are some that can be very hard to fill. We have remote locations, you know, labor markets are different. And so, the positions that are proposed here are ones that had historically been vacant or have been hard to fill over time. That being said, I mean, the loss of the positions and funding over time could result in a slower regular maintenance schedule, and so things could fall into deferred.

But immediately, I don't think there would be a an impact on deferred maintenance. It's that long term, you know, loss of funding and positions.

Great. Thank you very much.

And the CDF, CDFA. We we heard from your secretary about the whole pest threat that is out there, And it's ongoing and probably growing as international travel increases and the globe gets smaller and smaller. Concerns have been raised by the agricultural industry stakeholders that this is going to eliminating these positions will affect controlling invasive species, etcetera. Can you respond to that concern?

Thank you.

I'll do my best. Approximately, 10 of the 35 swept positions support early pest detection

and around 10. Of the how many?

Apologize. Of the 35. And I should introduce myself. I'm Arma Cozina. I'm the deputy secretary for finance and administration.

Thank you.

Apologies. Yes. 10 of the 35 swept positions support early pest detection and eradication programs. We do, at CDFA, recognize the important of those functions. And as has been mentioned previously, we do have the authority to reclassify positions and ensure that critical functions are fulfilled, and our legislative mandate is met, particularly when industry funding for those functions exists.

For functions such as these, we believe we are currently adequately staffed to meet our legislative mandate and are actively hiring for all of the positions for which we have funding.

So how many of the 35 positions are full?

Of the 35 positions?

So you have 35 positions. Yeah.

I will need to do look go program by program. It's really on a case by case basis.

The process that we went through after the positions were frozen or swept, but after they were identified for the sweep, was to be implemented an internal hiring process to ensure that as new positions became vacant, we were able to look at those new positions and the positions that we had swept and understand which ones that we needed to prioritize for posting, particularly in light of the 8% budget reductions. There were some positions that became vacant that we could no longer afford.

So we wanted to make sure that we prioritize hiring for critical functions.

We can go through and see which of those functions is currently being fulfilled by other staff. Certainly, the positions that were harder to fill are still harder to fill, and so some of those functions are still not being done. We estimate those about 17 of those 35 positions that were really hard to fill positions that we were going to have difficulty hiring for either way.

So just like we've identified with park rangers, you know, they have a 136 positions, and we're talking about eliminating 14 of them. Right? You have 35 positions in the permitting area. How many of them are vacant today?

All of those all of the positions that were identified, those that position authority is all vacant. In terms of whether the or not there is someone fulfilling those functions at the department, I will have to get back to you because each program is specific.

So you're you're eliminating all 10. The 10 positions being eliminated are all the vacant positions in the permitting department of the 35?

No. I apologize. I misunderstood the question. Third all of those 35 positions are throughout the department, and they all serve different functions. I can go through I think as was mentioned, there were seven for the Broom Rate program.

There are auditors within our, dairy marketing and our marketing services branch. We have environmental scientists throughout the department and then and then also within our animal health and food safety services. So they're throughout the department.

Got it.

Those 10 positions that are specifically related to the plant pests, the pest detection and eradication programs. Those are in our plant health division. I would have to check how how many total positions. There are about, I wanna say, close to a thousand positions within that division. And so these 10 positions are currently vacant.

How many peep like, their total vacancy rate within that division, I can get back to you.

Thank you. If you'll do that, we'd appreciate it. I'm gonna ask Department of Fish and Wildlife to come back up, please. Right? Sorry.

I didn't get this one while while we had you. Late breaking late breaking news here. Right? But what do the game wardens do? And how does the eliminations affect the percentage of game warden and positions that are filled?

Alright. That are out there. Can you help us with that?

Well, we're lucky to have our chief of law enforcement division here. So chief Arnold, if you'd like to take this one.

Sure. Thank you, mister chair. Nathaniel Arnold, chief of enforcement for the department. So to kind of break the question apart, what did the game wardens do? Simply, they're the oldest state law enforcement entity in California as a division.

They're responsible for patrolling 159,000 square miles of California, more than 1,100 miles of coast excuse me. Coastline including three nautical miles out to sea, all marine protected areas, 30,000 miles of river and streams, 4,800 lakes and reservoirs in 80 major rivers.

So not much to do.

No. The impact as we stated is fairly large. It would be about 10% of the overall wildlife officer positions, which would equate to close to 14% of the warden classification, which would be boots on the ground.

14%. So give me the numbers. What's 14% of what?

So we would so for sworn staff, we have approximately 500 wildlife officers. So, you know, close to 15% of that. 10% of all wildlife officers, he would be looking at close to 50.

Are all wildlife officers game wardens?

Yes. All wildlife officers are game wardens. Just different ranks from

And and what areas of the state will be most affected by this cut?

And and what areas of the state will be most affected by this cut?

Well, it's almost what you said earlier. Kind of the smaller the entities, the greater the impact. So when you look at other, police agencies of California, you know, some have up to 7,000 to to cover the state. We have 500. So this type of impact would be from Northern California to Southern California, response to calls, human wildlife attacks, wildlife trafficking, the whole host of what we do.

Okay. Great. Yeah. I note that, you know, with the highway patrol, we've exempted them because they're public safety officers. I know game wardens play an important role also in terms of public safety from that standpoint.

So thank you very much. I appreciate it. And with that, we will move now to item six. Yeah. We're gonna move to item six so that we can get those people back to work.

And then we'll come to item three. And my apologies to everybody for moving the agenda around. But what about Yeah. I was gonna say Oh. Lori, are you okay?

You're good? Alright. Great.

I'm doing back and forth between here and housing.

Uh-huh. Alrighty.

Okay. We are ready, if you'll identify yourself and...

Great. Thank you, Chair. Samuel Assefa. I'm the Director of the Governor's Office of Land Use and Climate Innovation, or LCI. So thank you for having us go early. Thank you more for not having me go right after Secretary Ross. I'm joined here by my Chief Deputy, Senior Deputy Director Abby Edwards and Natalie Kuffel. We are here to present an overview of LCI, but also present very specific aspects of the our budget. I'll start with going through an overview of the structure and just a little background, and then Abby will go through the details.

We're going to ask everybody to be pretty efficient with your comments. Thank you.

Thank you. So the LCI, the Government's Office of Land Use and Climate Innovation, formerly known as the Governor's Office of Planning and Research, was established by statue in 1970 right soon after the CEQA, the California Environmental Quality Act, was enacted.

We celebrated 55 years at the end of last year. From its inception, the office was tasked with implementing the CEQA and structured to serve as the statewide long range planning agency. LCI is primarily tasked with developing the initial draft of the CEQA guidelines, drafting technical advisories...

I'm sorry. We've been able to read that structure in advance. I'm gonna ask you to to move quicker to that part, to the background part. Yeah. So we can get to our questions.

Certainly. So LCI has a a few other structures within LCI, climate programs, climate initiatives, as well as a few other ones. So we'll send this in writing to you. Thank you.

Good morning, Chair Bennett and Member. Our I'll give an overview of our baseline request. So our three baseline requests this year really balance the need to maintain these essential services for California with the state's ongoing fiscal realities. So they represent functions and efforts that were previously funded on a limited term basis and do not represent any new programs or an expansion of LCI scope.

They are intended to maintain the minimum operational foundation needed as a state organization, ensuring that we can meet our statutory duties and maintain our core functions, like reliable technology, grant facilitation, and contract execution so that existing state staff can continue to deliver meaningful results for California.

So for our IT baseline resource request, we are requesting $6.2 million in general fund in 2026 and 27 and ongoing to continue the implementation of the IT services following the establishment of the LCI IT office. For administrative and legislative baseline resources, we were requesting $3.4 million in general fund in 2026 and 27 and ongoing to establish baseline support for core administrative and legislative functions. Permanent funding is necessary to ensure LCI maintains basic operational stability and compliance.

And then for our land policy baseline resource request, we're requesting $900,000 in general fund in 2026 and ongoing to support existing positions within our land policy unit. These staff are foundational to managing our core land use planning and CEQA workload, providing technical assistance and ensuring the state can effectively implement its land use priorities.

Maintaining this capacity is critical to delivering timely, consistent, high quality outcomes across our whole portfolio. And additionally, as a part of this item, we're requesting 949,000 in general fund beginning 2027 and 28 through 2031 to 32 to continue supporting existing positions responsible for implementing the judicial streamlining provisions established under SB 7 and SB 149.

These rules are essential to ensuring that the priority projects move forward efficiently while upholding the integrity of CEQA and meeting the program statutory requirements through its sunset. Happy to answer any questions regarding our baseline requests.

Great. If I if we if I can go back, you were you were giving us the overview, and I just want... Can you can you hit the five major programs? I cut you off after two programs.

Sure. So within LCI, we have the climate program, which is ICARP, integrated climate adaptation, Integrated Climate Resiliency Adaptation Program. We also have the Strategic Growth Council, which was formed by statue within LCI, and that is coordinated through seven agency secretaries. I serve as the Chair, and we have a number of funding programs as well as policy programs through that. The Racial Equity Commission, which was established by executive order, is also housed at LCI.

Finally, we have a military affairs function which is a statutory required function that we coordinate with Department of Defense on land use interface between installations and communities throughout throughout the state. Those are the major functions within within LCI that I'll be happy to...

So you mentioned the CEQA function, which is a major one that was given to you. You mentioned the Strategic Growth Council, and the climate adaption initiatives. Land use planning information?

So land use, so the office is responsible for updating the general plan for the state. We do that every seven to eight, ten years. The last one was, I believe, 2017. So the general plan guideline updates are a critical component. So we engage statewide with local jurisdictions.

Just to give you an example, since the last update, we've had over 250 new legislations that impact land use. So we are now in the midst of the next updates. So we're engaging in that in that function. So that local jurisdictions have their general plans updated to reflect.

Who are the major stakeholders that get involved in that land use planning general plan update?

Abby can walk you through that.

Yes. Natalie Kuffel, Deputy Director of Land Policy. So the major stakeholders that we engage with are cities and counties, specifically the planners that work for cities and counties. Oftentimes, because cities and counties are short staffed and under resourced, they hire consultants to assist them with updating their general plans. So we also have been coordinating with the consultant community as well as the legal community because there is a big component with CEQA, and oftentimes outside attorneys are brought in for that purpose.

So is the goal of this plan to identify for the state of California where we're going land use planning wise for the next seven years?

So the purpose of these guidelines is to assist the cities and counties with updating their own general plan.

So that they have the guidance that they need...

That long range guidance. Correct.

So this is an assistance to local government. Right?

Correct.

Okay. And then the statewide initiatives? Can, what can you tell me about statewide initiatives effort?

There are quite a number of most of them climate focused within ICARP, but there are also a number of them through Strategic Growth Council, and we could go through it to highlight a few of them. We'll start with ICARP.

I think that I think you're referencing the the nice summary by the LAO. And under statewide initiatives under that category, what's represented is the Racial Equity Commission and also the Governor's Military Council, that coordination work.

When he mentioned those two...

Exactly. Yeah.

They fall into that. Okay. Excellent. That's what I was looking for. Okay. Go on.

Courtney Massengale, Department of Finance. Nothing to add, but available with questions.

Alrighty. Great. LAO?

Good morning. Gökçe Sencan with the LAO. We have very brief remarks on the proposals. As the department presented, the governor the governor proposes to increase LCI's ongoing budget by $10.5 million from the general fund. Excuse me.

Overall, our review found that administration provided reasonable justification for these proposals. Some of the cost increases are associated with the OPR's restructuring into LCI and GO-Serve. Can you hear me now?

While you're looking at me, you're not looking at that. So move the microphone to this side, and then you can look at me and talk to the microphone. There you go. Great. Thank you.

Some of the cost increases are associated with the OPR's restructuring into LCI and GO-Serve, as well as LCI's transition to civil service, both of which were approved by the legislature through previous budget change proposals.

And some of the increase are also associated with LCI's increased workload, including CEQA work, grant responsibilities, and new statutory requirements. If these requests are not fully funded, LCI will not be able to provide the same level of service that it currently offers.

On the other hand, approving these proposals would mean taking on a new general, ongoing general fund commitment in the context of the state's projected multiyear budget deficit. The this will inevitably require reductions elsewhere or revenue increases.

And given this context, the legislature could consider whether maintaining LCI's responsibilities and staffing is a higher priority than other general fund supported activities. If not, the legislature could consider downscaling LCI's statutory and grant responsibilities, revisiting program implementation timelines, and readjusting the associated resource needs.

Thank you. Overall, congratulations. You've got a reasonably good review from LAO from my perspective. Right? And to be identified as as coming up with reasonable justifications for for the positions. I think there are reasonable justifications for the positions.

That doesn't mean that I can't I don't think that we can't always squeeze and accomplish more with efficient and particularly with AI and the tremendous impact it has. I can see land use documents becoming much easier to create. I just watched literally the creation of a website in two minutes that would have taken a long time.

And so I will I will be looking at this department to squeeze every dollar out, every dollar of value out of any investment that, you know, that we end up agreeing to make here with this program. The other thing I would like to get on the radar screen is of all of these things, some of them I say are nice to have, right, rather than must have.

But one that I think is a must have, and I think your department might be the place for it to be located, is we are doing an atrocious job in California of implementing new technology in various departments because a department only introduces new technology maybe every 20 years.

They have no experience at what the latest and greatest and what's what are the right contracting things we should do. Meanwhile, the people we're dealing with are dealing with this all the time. It's like buying a it's like buying a car. You know, you're buying it from the car salesman who's selling cars all day.

He's a professional, and you're going in there once every twenty years to buy a car. We need professionals in the state of California that do nothing except float from, not float, but just go to department to department and coordinate their efforts at IT implementations, IT upgrades.

I will be requesting that that be a significant part of the administration. And it seems like this is the department for that to be held in. You don't have that expertise right now, but you need some people with that expertise that ought to be, I think, put into this department or an appropriate department.

We have some references to this department, but we don't, I mean, right now, just to give you an example, 911 upgrades. They did a 911 upgrade, and then they turn around and say, oh, it didn't work because the contractor that we contracted with, they didn't they didn't meet the terms of the contract.

Well, they didn't have very many consequences for not meeting the terms of this. Bottom line is the taxpayers were stuck holding the bill again, and this has not happened once. This has been more the standard rather than the exception in terms of IT implementation.

So I hope you'll take that back, have a conversation with the administration about that, and know we're coming with that kind of request. Not so much this year, but I hope you can embed it into the system so that you folks are thinking about that next year as we have a new administration coming in is where we will do this.

We we made one run at this earlier, didn't get there a couple of years ago. We will make another run at that next year. So I wanted to take this opportunity to say that. Thank you very much. Anybody else have any questions for this, item six? You made it back just in time, Assembly Member Wilson.

Right? And she got it. Alrighty. Great. So we're gonna go to item three, and we will let you lead off with the questions of the prized leadership interrogation questions when the time comes. So if people will come up for item three, please.

It's I'll find it. What's the page? Page 14. Good. That's faster than just left page 12.

Okay. Okay. Good. Oh, there it is. Okay.

Good. Item 14. Got it. Climate smart agriculture proposed spending plan.

Hi. Good morning, mister chair and members. My name is Virginia Jameson. I'm deputy secretary for climate and working lands at the California Department of Food and Agriculture.

Okay. Finance? I can skip your presentation. You've already done it. Right.

Okay. Amazing. Thank you. Alrighty. Okay.

LAO?

Brian Metzger, LAO. We find the administration's proposed plan for the climate bond, including this chapter, to be reasonable and consistent with bond requirements. We would just note that there are a number of new programs in this chapter, tribal food sovereignty, regional farm equipment sharing, and even initial allocations for some programs like, improving land access and tenure, that if the legislature has certain goals or preferences for that program, now is the time for the legislature to provide that direction.

Great. Thank you.

First thing I'd point out is we have done a health we've done a healthy amount of spending from the bond on the smart agricultural programs. We're down to only 19% left for future years, which is not a bad thing. If we've spent that, 81% efficiently, it's a good thing. And if we didn't, shame on us, right, in in terms of doing that. But we are down, so we have had a healthy amount of spending left.

But there's a significant amount of spending this year, and we wanna make sure that we're doing that properly. The healthy soils program is one that I'm particularly interested in in terms of the efficiency of the spending. But certainly the vast majority of the money was spent in the last last program here as we as we go forward. So before I get into all of those things, I said I would let some remember Wilson be our first interrogator dealing with AB, 05/24 on land access.

Thank you. Appreciate, the opportunity, to talk about something critically important. As we know, today, very little has been done to address the farmland access crisis in California. Fundamentally, small beginning and underserved farmers have an uphill battle in trying to access secure land in California. It requires many tools and strategies, one being creating a new and first of its kind program to provide vital resources.

And considering how new and complex addressing this issue is, it's only appropriate for new and detailed legislation with community engagement. And so after drafting language in my original bill, AB 408, the agriculture bond, and integrating it into Prop four with 30,000,000, secured for the program, bill, as was mentioned last year, AB 524. So five twenty four was specifically derived to provide legislative direction and enact the land access program. Included exactly what stakeholders and community members wanted to see.

Given the legislation legislative process and the clear direction from stakeholders, as I understand it, the administration is open to moving forward in this in this direction.

And so I'm wondering, what involvement you your office or the offices, will have to work, with our office on budget trailer language and to implement the program in order to capture our legislative intent, particularly considering we do not know what administration will be in place this year. So we felt as we did last year and even more so this year that it is a time sensitive subject.

Stephen Benson, Department of Finance. So, first of all, I I think we're, open to engaging and having a conversation about the best way to handle that. Where we're looking at and have to make sure we sort of navigate carefully is once the bond act passes by the voters, we have some constraints in place in terms of how much we can impact or change the design and the scheme of how the bond act is laid out.

And that's related to it's really the the I'm not going into too much detail. It's really related to the the bond sale mechanism, the technique technicalities of that.

We require to get opinions from the attorney general's office as well as from bond counsel. And one of the things that's key to their opinions and our ability to sell the bonds is that we haven't done anything to change the design in the scheme substantially of the Bond Act. And so when it comes to legislation that would impact the bond act, we just have to be really careful with sort of how we how we navigate that.

So we're happy to engage in conversations and what we think is reasonable to be done within those constraints.

And I think one of the things that, in particular, to to AB 524, there there were other pieces of legislation that were utilizing prop four funding, and in some cases, those those pieces legislation included, sunset dates, and it was clear that the or appears very clear that the sunset date and the term of that program will be consistent with funding available in proposition four to support it.

And so it doesn't create sort of ongoing funding pressures. I think one of the things that we wanna make sure we navigate with this is, is was mentioned in the administration's feedback last year, concerns about ongoing funding pressure. And so I think in terms of five twenty four, what we wanna make sure we navigate is making sure that we don't create pressures from other fund sources and that we sort of live within what Prop four Provides in terms of the setup and administration of that program.

But, again, overall, just happy to engage in a conversation, what makes sense to set that up, but just wanted to to put out there that there are some constraints that we sort of have to live within given the bond sale mechanisms and our And

so I make sure I understand you clearly, because we did, in our we did administration in advance of the veto message of that that was the particular issue of concern. Also, in working with the Department of Finance as we all do as legislators on our bills, there was no concern given that there was an issue that we needed to add additional language which we would have been happy, to provide.

So I just want to make sure I understand that this constraints that you're talking about as it relates to the budget act I'm sorry, the bond act, and as it relates to AB 24 was in particular that we there was no sunset date in the bill.

So so that's one of them. A a primary one.

What additional concerns that you have? I know you mentioned we didn't have to get in the detail, but that is the purpose of

Sure. I'd be happy to whatever it'll take to run again to. So for example, one the the five twenty four includes definitions of a variety of terms. Those terms are also defined in the bond act, but the definitions between the two are different. So we wouldn't want to have a term defined differently than what the bond act says that could create a a sort of a design scheme challenge for us.

And so aligning those definitions is something that'll be important. If we're putting in clear constraints or directing how funding has to be used that's beyond what the bond act contains, we have to be very careful about that. It's so, for example, in this particular instance, that section of the bond act has a subdivision b that says, hey. You can do a loan program.

And then it's in in subdivision a, it kinda gives here's the purpose of it, leaves that pretty pretty open in terms of what you use it for.

If we come in subsequent with legislation that says you have to use it for a grant program and it has to be used in that way, that might be concerning because that's an additional constraint that wasn't in the bond act to change the design and scheme of the bond act. And so not that we can't use it for grants, we just need to be very careful in terms of how we go about impacting what the bond act says.

So those are the things I think we need to work through just it's sort of an eye of a needle, I guess, to thread in a way in terms of sort of where we can go. But we do want to be helpful in trying to figure out how we can do that.

I will hold you to being helpful. I will note not just for my bill, but for all of the bills going through the legislature, that it is a painstaking process to go through the legislative process intentionally, because we want to engage everyone, whether it be our colleagues from across the aisle or members of the public. And so a lot of resources go into doing that. Not only resources from the administration, but from every single committee.

And all of the things that you described are very technical in nature.

And I think that's why technical assistance and as we navigate through this process is extremely important. And, this is this administration's last time to have an impact on what the legislature is doing, and I would encourage not only the Department of Finance, but every single department to provide that level of technical assistance so we can get bills signed by the governor.

Because it was our intent to do something that was aligned with the bond act, that was aligned with the intent of going I would happen to be a part of the negotiating team with that. There was a line in the tent of having, the most ever spent on sustainable agriculture in line with the intent of our stakeholders.

And so would have happy would have been happy to last year to marry in, these types of issues, to make that bill better and to get it to where it's something that the governor could assign so we could be a year ahead of where we are now.

But I'm glad that you all are willing to be collaborative in nature to ensure that we have trailer language that, matches the bond act as well as the legislative intent of of of this body. So I appreciate you doing that. A follow-up in this subject is the governor's budget proposal allocates 5,000,000 for for this land x area. Could you tell me what the rationale is for that figure and where it came from?

So I'm gonna ask the Department of Conservation to come up and talk about that one.

Thank you.

Houston. You use the microphone right there, please. Good morning.

There you go.

Good morning. Jennifer Lucchese, the relatively new director of the Department of Conservation. Thank you for that question. We envision that the $5,000,000, would be used to help, provide support to stand up the program, and our vision is to hit the ground running on July 1 with a very collaborative and transparent effort working with socially disadvantaged farmers to develop that program together beginning July 1.

Okay. And so is the plan then to implement the intent and direction from the stakeholder process to ensure that the program aligns with voter intent that we've already had? So remember, we we last year, we went through this process. Yes. Of course.

So is that is that the plan or you're coming up with a new plan?

No. Our our plan is definitely to align the program with the voters intent as outlined in proposition four.

Yeah. But I'm talking about AB 524 and that and that process that we've outlined. And so are you because as I understand it, as the that there is I mean, the the DOF, DOCU Are amenable to allow language from 05/24 in the budget trailer language of that process already done.

You noted that on July 1, you're having an starting implementing a plan that involves stakeholders that match the voter intent of Prop four, but are you adjusting that to match legislative intent that was given last year?

We will certainly, align the development of the program to match any legislative direction that is provided. That is our goal.

Yes. Thank you.

At first, I just wanna thank Assemblymember Wilson. She really was one of the real champions in the legislature. Yeah. At the time, we had people wanting to do a housing bond. We had people wanting to do all kinds of bonds, but it's only one bond that made it through the legislature, and that was this climate bond.

And Assembly member Wilson was one of the real champions that that that made that happen. So, with that, I'd also like to point out that the legislature pushed this, and we did not have support from the administration, for doing this climate bond. It was signed, but it was not with any support in terms of help trying to get it through. So we have always asserted that this $10,000,000,000 is something we should be taking the lead on.

And so with that, just imagine where we would be today if we didn't have the climate bond with as but the structural deficit we have, etcetera, we would really be, hurting in terms of so many areas and stuff.

So I think it was good leadership, on the part of the legislature and Assemblymember Wilson, one of those real champions again. So I'm really supportive of where somebody else Assemblymember Wilson is trying to go. This is the particular chapter of the bond that she specifically championed and and and focused on. And so I think many of us are very frustrated with the veto and the veto message. So I have this question for you with the veto message.

And the veto message, the governor writes that the recent budget action by the legislature did not explicitly appropriate fund appropriate funding to support this program. There's no sustained funding to support the the ongoing cost pressures this program would create. What are the ongoing cost pressures that would be created? And let Department of Finance answer that or you answer that. Okay?

What are the ongoing cost pressures?

So the way that the bill five twenty four is drafted right now, it's drafted in a way that it sort of sets up an ongoing program. It creates it creates a a new fund. It, allows for prop four funding to be transferred into that, but there's no, like, end to it. And so if you set up this program, all the prop four gets spent. There sort of then begs this question of, okay, what Great.

How are we gonna keep this ongoing program funded?

So let me let me turn to assembly member Wilson and let you respond to that.

Well, first of all, would have happy to put in a sunset if that would have got the bill not beat out. Secondly, there's lots of programs that don't have funding and the program cease to exist even though they might be allowable. I mean, still on the books because you might have funding later. And so I think there was language if if I remember correctly, and I was getting ready to pull up the original bill language, that talked about upon appropriation by the legislature.

And so there's this recognition that we all appropriate funds for a program.

And so are you saying that there are programs that exist today that don't have allocation and we're still doing those programs?

I think there are a number of pilot programs that have been started. So there's there's a number of ways these things are created. So in some cases, we do pilot programs or provide limited term funding. You know, we just talked about the, farm to school funding. That's been started up over one time funding, and then we're we're here now talking about do we make this a permanent program with ongoing funding.

So that's one one route we take is you do one time funding with pilot programs, and you have these regular check ins. Are we gonna keep this going? Certainly, there have been instances where we've created programs through a lot of different routes that had limited term funding but ongoing authorizations. And so we found ourselves in similar situations where we're saying, hey, we have this program that we've created and set up, and it had a certain window of funding.

If we now run onto that funding, and so you find yourself again back in that situation of are we gonna keep this program going again?

What's the fund source? That kind of thing. I think last year, what what we were looking at with some of these different situations in this particular budget context was limiting the amount to which we create some new cost pressures given the focus has been on trying to, address the ongoing budget deficit. So I think that's the framing that was behind that.

So you're saying the adjustment was because there are programs on the books that don't have funding and they're not actively they're not active programs. They moved to be an inactive program because there's no funding for it. And people are looking and advocating every year. Well, can you put some money in there? Because we really like that program.

But they still are on the books. So I think I hear what you're saying is that the the governor made a conscious decision that if something didn't have ongoing program and there was no sunset date that those programs, that those types of bills or initiation of programs would be vetoed. Is that what you're saying?

I think the perspective is in our current budget situation not creating more programs that are ongoing without ongoing fund sources. Certainly, there are programs that have been created in in the past that still exist And by this governor. That aren't funded. And I think we've had lots of conversations about we need to look at some of that stuff and decide whether or not they should stay on the books and maybe they'll But I

will note once again, this is why technical assistance is extremely important, and I'll drive that home because I don't think this administration has done the best job in providing technical assistance consistently to legislators, for for legislation. But I will say, though, that, the purpose of the bill, was around prop four. The language of the bill was around prop four.

So the intent of the bill was around Prop four, and it was always looked at that Prop four was the source of this, that we have this level of major investment that we're able to get in light of the budget circumstances that wasn't drawing on the general fund that was from a dedicated funding source.

And so that was allow that was, laid out throughout the bill, throughout every single conversation, which is why I got more partisan support because I can bet you my Republican colleagues, if they felt like it was an ongoing draw on the general fund, would not have supported that bill.

That that was part of it. And so I think, I I recognize though that the intent of the governor at the time was if something is not explicit, even if it's implied, I'm not I'm I'm I'm I I wanna be mindful. I'm nearing the end of my term. I don't wanna leave budget headaches for the next person. So I I do get that.

But that I find that odd. But thank you. I appreciate your answer.

I hear and accept that we didn't do a great job providing you technical assistance last year. And sorry that that was the case. We will try and make sure that you get that this year.

Yeah. And not just me, everybody. Because this is the last year. This is the this is I will say this is his this is the administration's last year to have a stamp, and we don't wanna get to where we really good things that could be great things for him as a part of his legacy, get lost because of, you know, minor things that could easily be fixed that are technical in nature.

I know our, the intent of the bill is aligned, especially given, the the comments made by our new director.

The intent is there, but it is the devil is in the details, and I get that. You know? I haven't been an auditor before. The devil is absolutely in the details. And and that's why I think it's important that we give that type of feedback so that the decision for the governor, any governor, is centered around whether this is a policy direction I wanna go in, not on some minor thing that could have been fixed.

Yeah.

And I

think that's the the intent is we were always in the spirit of collaboration, which is why we worked heavily with our Republican colleagues to get them there with the community. And so I just wanna make sure that when when legislators put that level of effort to involve so many people that the administration, joins in that discussion as well. But I do appreciate you and appreciate this governor. I'm a fan.

I would like to just close this item, with these comments, which is, I completely understand why, the executive branch is concerned about getting out over their skis in terms of helping legislators with their legislation because it can imply the governor's now gonna support the legislation because you gave us some advice and we took it. And so therefore, now you're obligated to, you know, sign the bill, etcetera.

At the same time, that caution can go so far as to not be a positive in terms of good government. It's not good government for the governor's office to get out over their skis, right, in terms of too much too much optimism about this. But it's also not good government to get to the point where we go through the whole legislative process.

We never get one piece of advice about, you know, one of the things that there is a real concern is that there's no ongoing funding for this. That technical assistance, because you heard the author say, hey, I would I would have put a sunset on that if that was the concern. Right? And that could have meant a a year sooner because this is not like general fund.

This prop four is something that there should be more advanced collaboration on because, again, it is the legislature that led on this, not the administration.

So I think the administration should have more deference in terms of working with the legislature as somebody who's been a champion comes up because I will assure you, we will, fight tooth and nail. We will not fund the $5,000,000 unless we get things worked out with, Assemblymember Wilson, in terms of that. But I hope that that I offer that in the spirit of what's good government.

Recognize you can't go too far, but on prop four funding, we probably should have a a little bit different level of cooperation. And certainly, before she gets to the finish line, say, this is really an issue with this.

You've gotten bipartisan support. You saw that bill moving certainly close to the end would have been an opportunity to tell her this is this is gonna be important. If that's really the reason this is being vetoed, if that's the the the significant reason. So with that, thank you very much. Really appreciate it.

Appreciate the the robust conversation we just had here. We'll go to item four, and that's the extreme heat. And speaking of extreme heat well, what's

that?

We don't have that.

Yep. While everybody's coming up, this is the only place in California where it gets colder as the day goes on. Yes. And that's sitting right here underneath these these air conditioners. So the extreme heat people with the solution is we're going to release some of this cool air to those extreme heat places.

And with that, we will let the administration kick it off. Thank you. Yeah.

Good morning, chair. The climate bond allocates

You are.

Oh, Courtney Masson, Yale, Department of Finance. Thank you.

Thank you.

The climate bond allocates 450,000,000 for the extreme heat mitigation chapter over the lifetime of the bond. This funding is allocated across various programs within the office of land use and climate innovation, the natural resources agency, Cal Fire, and the department of food and agriculture. The budget act of 2025 appropriated a 110,000,000 across these departments with investments in programs such as urban greenings, extreme heat and community access program, and fairground updates.

The governor's budget includes an additional 241,000,000 to support the delivery of these programs as well as investments in the transformative climate communities, extreme heat and community resilience centers, as well as the urban forest program that's administered by Cal Fire. I'm now going to turn it over to the strategic growth council, to provide an update on its programs.

Thank you. Erin Curtis, executive director of the strategic growth council. I can provide an update on two programs that are, programmed in proposition four. The first is the transformative climate communities So far, we've had four excuse me, five rounds of this program and awarded $424,000,000 in grants to 37 of the most disadvantaged communities in California through a competitive process. That compares to a total of $917,000,000 that was requested through that competitive process.

And through the through those 37 grants, I can provide some statistics as far as what we've been able to achieve. C o two reductions equivalent to about 70,000 cars off the road for a year. The construction of nearly 400 housing units. We've passed out 17,000 transit passes, purchased 27 electric buses, 82 EV cars, and 92 charging stations, created 43 miles of bike lanes and pedestrian improvements, planted 18,200 trees. And, the final guidelines for, the prop four funded round six for this program have been drafted.

We have are asking for $98,400,000, and that will be up for approval by our strategic growth council at their meeting next month or next week, rather. I have one other program to, provide information about. It's our community resilience centers grant program. We've had one round of this program so far, and we've award awarded $97,500,000.

It has funded new construction and upgrades of neighborhood level resilience centers to provide shelter and resources during climate and other emergencies, along with year round services and ongoing programming that build overall resilience in these communities.

In round one, we awarded over 97 and a half million dollars, that includes more than 5,000,000 to 11 different planning grants, nearly $9,000,000 across four project development grants, and $83,000,000 across nine project implementation grants where we are, supporting the construction of a community resilience center. We, our strategic growth council is developing final guidelines for round two of this program in which we have $55,000,000 from proposition four, and those are also going to be up for approval next week at the council meeting.

Thank you very much. Next.

Abby Edwards. I'm the senior deputy director at LCI, and I'm gonna provide an update on the extreme heat and community resilience program. So this program launched in 2024 with $32,000,000 in awards for 45 grantees across 23 counties. So through this program, we're investing in a wide range of efforts to reduce the worst impacts of extreme heat for the most vulnerable Californians.

That includes projects like heat action plans and awareness campaigns reaching farm workers and people experiencing homelessness from Imperial County to Ventura County to San Diego, Los Angeles, King, and Sonoma County.

We're also funding on the ground infrastructure projects like cooling centers in places like Calaveras and Santa Rosa, park retrofits that age add shade and cooling features in Los Angeles, and home retrofits, in the most heat vulnerable communities in Lake County. Additionally, UCLA Luskin is currently working on a strategy evaluation to help us understand what makes for the most effective investments that will be sent to the legislature next year.

Round two of the grant program, will be released this summer, with additional we're expecting, 15 to 20 implementation projects to be added to our portfolio, and we're requesting 24,000,000 for that.

K. Thank you. Anybody else? LAO.

Gupta Shenzhen with LAO. This proposal did not raise any concerns for us. We would like to just highlight one point for the legislature's consideration. Some other areas of proposition four leave room for more legislative discretion over how to direct the funds. However, the funding specified for LCI and the Strategic Growth Council is for already established and existing programs, which leaves little room for legislative discretion other than the timing of appropriations.

Thank you for thank you very much. The appreciate the updates on these programs. Could you repeat for me again the number of houses that were were built? You identified early in your presentation.

This is just through the transformative climate communities program. Right. It it is about 400 housing units.